Lebanon’s interim central bank chief vows not to lend money to gov't, calls for economic reform

BEIRUT (AP) — Lebanon's interim central bank governor called for the country's ruling class Friday to quickly implement economic and financial reforms warning that the central bank won't offer loans to the state and does not plan on printing money to cover the huge budget deficit to avoid worsening inflation.

Wassim Mansouri's comments came nearly a month after he took over the leadership at the central bank after the term of his predecessor, Riad Salameh, ended on July 31.

Lebanon is in the grips of the worst economic and financial crisis in its modern history. Since the financial meltdown began in October 2019, the country's political class — blamed for decades of corruption and mismanagement — has been resisting economic and financial reforms requested by the international community.

Since taking office, Mansouri has been urging the government to pass some reforms, cautioning that the central bank cannot continue to spend money to fund the government's budget deficit.

“Every day we waste without drafting laws, losses increase as well as the possibility of a state collapse,” he said Friday.

Mansouri added that the 2023 budget that was approved by the government last week had a 24% deficit while the central bank had asked for a deficit-free budget.

“The central bank will for sure not cover the deficit by lending the government neither in US dollars nor in Lebanese pounds,” Mansouri said.

“Lebanese pounds will not be printed to cover the deficit because you know what this will lead to.

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